What Can States Do For Graduate Medical Education?

Paul H. Rockey, MD, MPHScholar in Residence

Accreditation Council for Graduate Medical Education

ORGANIZATION OF STATE MEDICAL ASSOCIATION PRESIDENTSJune 6, 2014

U.S. Spends $2.7 Trillion Per Year on Health Care

• $8,400 per person per year • Median household income $51K • Enough money to invest in the health-

care workforce, including physicians• How should we pay for GME?

GME Funding Issues• Need more GME positions to keep up with

population growth, aging, chronic diseases and medical school expansion

• Need new training venues to meet community health needs

• Need GME positions in new models of health care (medical homes/chronic care models)

• Need to fund emerging costs (accreditation, technology, simulation, faculty, duty hours, etc.)

Projected shortages of physicians, 2008 to 2020

58,000

91,500

7,40030,200

64,100

With ACA

Without ACA

Projections prepared by the Lewin Group for the AAMC.

Medicare funding of Graduate Medical Education

• Medicare is funded by a payroll tax • Spends $525 Billion/year on medical services• Pays $9.5 Billion/year to teaching hospitals for

GME as part B (hospital revenue)• Less than 2% of Medicare is spent on GME • GME payments are tied to hospital beds

occupied by Medicare patients• Medicare funding of GME “capped” in 1997

Explicit Payments for GME

• Total as much as $15 Billion from all sources: Medicare, Medicaid, VA, DOD, CHGME, HRSA, direct state support, other...

• GME spending is only 0.56 percent of the 2.7 Trillion spent on health care

• Fundamental to future medical workforce

What’s the problem?

• “Public good” vs. “subsidy to professional education”

Projected U.S. Medical School Graduatesand First-Year GME

Approximately 7,000 IMGs also entered first-year GME in 2009.Projects 1% annual growth in number of first-year GME positions.Data compiled by AAMC Center for Workforce Studies, 7/2009 from 2008 AACOM and AAMC sources.

Most GME funds go to teaching hospitals

Most data on GME are national.

Why look at states?

State Governments in the U.S. Control the Delivery of Health CareStates determine• who can deliver health care through

professional licensing boards and scope of practice legislation

• what services are paid for by Medicaid and private insurers through insurance regulations and legislated benefits

• how care is provided through regulations of health-care facilities

States’ Roles are Expanding

• States fund public medical schools and several are funding new medical schools.

• The Affordable Care Act (ACA) strengthens States’ roles by vesting in them authority to expand Medicaid and/or to create state-based insurance exchanges.

• There is a high degree of variability among the States.

Resident physicians per 100,000 state population

10 or fewer residents11 – 20 residents21 – 30 residents31 – 40 residents41 – 50 residents60 or more residents

• Develop sustainable all payer funding

• Assess health care workforce regularly

• Train in settings accountable to populations

• Create new state-wide structures to allocate GME among specialties, geographies and sites

• Target GME expansion to high priority needs

What States Can Do

What States Can Do

• Tap private insurance as a sustainable source for GME funding: – Bill in the California Assembly would levy an insurance

surcharge to fund $100 M/year for Graduate Medical Education

• Appropriate funds to initiate new (or expand existing) GME programs: – Georgia is creating new residency programs in “virgin”

hospitals that will qualify for Medicare funding– North Dakota, Florida and Wisconsin have appropriated

funds to expand residency training

What States Can Do

• Award GME funds to teaching sites in non-hospital settings: – Kansas, Minnesota, Missouri, and West Virginia – States with large rural populations

• Target Medicaid GME funding toward State workforce needs: – Most States already fund residency training, either

through appropriations and/or Medicaid– GME funding by Medicaid totals nearly $4B per year– States could shape GME with their Medicaid funds

Why Use Medicaid to finance GME?

• States control Medicaid expansion under the ACA• States could link health workforce training to

innovative models of care for Medicaid recipients, for example, in Teaching Health Centers (THCs)

• Medicaid has the advantage of Federal matching • 1115 Medicaid Waiver application:

– Illinois waiver would restore Medicaid GME, targeted to shortages and THCs

• Caution: Contracting Medicaid to for-profit insurance companies may exclude GME funds

National “Game Changers”

• Institute of Medicine Report on the Governance and Financing of Graduate Medical Education– to be released June 19

• Single GME Accreditation System– ACGME and AOA have agreed to work together

• Congressional Action may still happen– Several Bills would lift Medicare cap on GME funding,

(with conditions)– For details, check out the AAMC website at:

www.aamc.org

What Can States Do For Graduate Medical Education?

Paul H. Rockey, MD, MPHScholar in Residence

Accreditation Council for Graduate Medical Education

ORGANIZATION OF STATE MEDICAL ASSOCIATION PRESIDENTSJune 6, 2014